Oman set to limit number of foreign workers

Oman's government will limit the number of foreign workers and sharply raise the minimum wage for locals in a drive to increase employment of Omani citizens, state news agency ONA reported.

A statement by the Council of Ministers, carried by ONA and seen by Reuters on Thursday, said the government would aim to limit foreign workers to 33 percent of Oman's total population.

The minimum monthly wage for Omanis in the private sector will jump to 325 rials ($845) this July from the current 200 rials, ONA quoted the council as saying.

Despite its oil wealth, the government is keen to move more Omanis into private employment to avert social unrest and prepare the economy for an eventual fall in oil reserves, which could start later this decade.

Since 2011, there have been sporadic street protests to demand more jobs. The International Monetary Fund estimates unemployment among Omani citizens may have exceeded 20 percent in 2010, though government officials say that estimate was far too high and that the number of registered unemployed was reduced by three-quarters to about 17,000 last year.

The new measures, which are subject to review by the government's Shura Council, could have a major impact on the economy, though in practice authorities may implement them cautiously to avoid disruption.

Around 1.3 million or 39 percent of the population of about 3.3 million are foreigners, most of them workers brought in to do skilled or strenuous jobs in the oil, construction and services industries, according to official data last year. Most are from south or southeast Asia.

Oman's ruler, Sultan Qaboos bin Said, has acknowledged that large numbers of foreign workers are needed for industrial development and construction of a national railway. It would be impossible to find local replacements for many of these workers in the foreseeable future.

So a sudden mass expulsion of foreign workers looks unlikely. The Council of Ministers did not specify a deadline for the 33 percent target to be hit.

But the rise in the minimum wage could affect many businesses in the near term. The Times of Oman quoted the Public Authority for Social Insurance as estimating over 122,000 registered employees would receive higher pay.

The Oman Society of Contractors, the umbrella body for construction firms in the country, asked the government to reimburse companies for additional costs incurred because of the wage hike, the newspaper reported.

The Council of Ministers identified mechanisms that could be used to boost employment for Omanis, including revising the foreign investment law to stop unnecessary recruitment of foreign workers, and changing procedures for registering companies, ONA said.

A team of government agencies will be formed to submit progress reports on moving Omanis into private sector jobs, it added.

As long as the GCC is so dependent on foreign workforce, the GCC nationals will never be able to grow and lead. It has been around 50 years if not more that the GCC is dependent on foreigners, how come the GCC nationals are still lagging behind in every sector and considered dimwits??? There is a long term and a short term solution to root out this monopoly that has caused the stagnation and frustration of the GCC nationals and permanently stunted their development, the long term solution is to encourage the GCC nationals to have more children, and the short term solution is granting citizenship to Arabs (who also are marginalized in the GCC market) who share with us the same language, culture and identity. Other solutions have proved futile and nonsensical.

Posted by: Adam
Wednesday, 13 February 2013 1:56 PM[UAE]
- Qatar

@ Gooner49, come on dude whom are you trying to fool? You do not seem like the proverbial ostrich that buries its head in the golden Arabian Gulf sand. Your comments are so comical unconvincing flimsy and so very very very desperate, hilarious actually.

Posted by: Man
Wednesday, 13 February 2013 11:28 AM[UAE]
- Qatar

@Qatari, there are many other arab nationals being granted citizenship. Go and check with the respective govt. agencies. I know of a palestine guy who got it recently in my company.

Posted by: Gooner49
Tuesday, 12 February 2013 12:33 PM[UAE]
- UAE

Don't bunch the GCC as a whole...each state has it's own policies. With regards to the UAE..."Never be able to grow and lead"? What planet have you been on? We lived in conditions that can be considered as beyond miserable a mere 40 years ago. Have you ever taken a moment to think about that? No fresh water to drink, only salty water? No sewage systems? No AC's in the summer? Yet here we are as one of the fastest growing economies in the world with a national population that went from not knowing what books were to chairing boards of the biggest companies in the western ?civilised? world. DON'T tell me we can never grow and lead, we have done much more.

It wasn't a foreign workforce that helped us get to were we are...don't be so arrogant. ONLY by the good fortune of having oil underneath our feet and a smart leadership have we achieved everything we have done to date. Money and leadership led us to put together a plan that included bringing in experts to do A JOB!

Posted by: Gooner49
Tuesday, 12 February 2013 12:32 PM[UAE]
- UAE

As for citizenship? Why should for example the UAE nationals...a minority in their own land, give other arabs (whom outnumber them) citizenships and ergo power? Don't you think that with all these religious and political uprisings happening around them it's a good or safe idea? Why don't you start thinking of the ramifications of immigration policies before jumping to half-baked ideas.

Also dependency works two ways...yes it is true that the UAE does require expats to assist in the development of the country nobody denies that, but don't for one minute think that the expats don't need the UAE. If that was true why are they living here for decades? Come here and stay here illegally? Sell their livelihood to come? Risk their lives doing dangerous work? Please save me the crocodile tears about these countries desperately needing expats, I can argue it's actually vice-versa.

Posted by: Faisal
Monday, 11 February 2013 7:39 PM[UAE]
- Kuwait

Spot on Saqr, but the second solution which actually looks more feasible and plausible will not be palatable to the few GCC nationals who are not of Arab origins and who do not even talk in Arabic in their homes.....

@ Ahmed & Qatari, please allo me to clarify something as you guys seem to live far from reality and have negative stereotypes about expat. The same prejudice extreme right parties have against arabes and muslims in the west.
1) Expats before 2005 were able to send home some money. Since, it is not the case due to expensive everything. Most of the people working in UAE are unable to send money home. This means that the region is not attractive anymore.
The discussion about reducing foreign labor is coming from this fact. Authorities realize this and it becomes urgent for them to sell the new policy like if they are restricting access. Not the reality.
2) Authorities could oblige all local business people to hire only locals. They have the right to do it and it can be a straight forward decison and action. Ask yourselfs why this is not done.
3) Due to lack of transparent laws and clear cut implementation, Dubai is not attractive for investors who do not like uncertain environement.

The GCC needs to start limiting foreign worker employment in certain sectors of the society in order to restructure their economies in order to increase growth potential income steadily among locals. This change could aim to build a more inclusive society by generating resources to assist GCC nationals get a fair share of the economic pie and would allow GCC economies to grow on the basis of skills, innovation and productivity. GCC governments might want to raise their research and development spending, establish export-import bank loans to small and medium companies and raise the fees companies must pay to bring in foreign workers. There will always be sectors that will need foreign labor, but to call GCC nationals lazy is an old line used by foreigners, mainly from the sub-continent, to justify their employment in the GCC. GCC governments have invested greatly to modernize their nations, so to increase productivity through proper training is a better route than hiring foreign labor.